Tata Motors’ profit up on strong JLR sales1 min read . Updated: 28 May 2010, 12:10 AM IST
Tata Motors’ profit up on strong JLR sales
Mumbai: Strong sales of Jaguar and Land Rover (JLR) models helped Tata Motors Ltd, India’s largest auto maker by revenue, turn in consolidated profits for the year to 31 March, against a loss in the previous fiscal.
The company credited the introduction of new models and restructuring initiatives underway at its UK-based subsidiary for the profits.
Tata Motors reported a net profit of Rs2,571 crore for 2009-10, against a loss of Rs2,505 crore in 2008-09. Income went up 30% to Rs92,519.25 crore, compared with Rs70,880.95 crore the previous year. JLR operations contributed Rs49,300 crore to the income in 2009-10.
Tata Motors acquired the JLR business in June 2008. It despatched 193,982 JLR units to dealers from between June 2009 and March, compared with 167,348 units in the year-ago period.
Earnings from domestic operations were boosted by a growing contribution of trucks and buses in overall sales. Truck and bus sales rose 41% to 373,842 units over the previous year.
Ajay Sethia, analyst at Centrum Broking Pvt Ltd, said the company’s earnings are in line with expectations. But he cautioned that “maintaining volumes could be a big challenge" as JLR earns two-thirds of its revenue from Europe, which is facing a financial turmoil.
Changes in environment regulations in some key markets of JLR is another concern.
Carl-Peter Forster, group chief executive at Tata Motors, said the European crisis won’t have an immediate impact on JLR sales as it has a healthy order book.
Forster also said he expected the economic recovery in the US and China to offset the slowing European demand. JLR sold 25,000 models in China in 2009-10. “We plan to broaden our foothold in China," Forster said.